Fri | Jul 19, 2019

Debt-free Blue Power invests to grow revenue

Published:Wednesday | December 12, 2018 | 12:00 AM
In this Gleaner file photo, a worker at Blue Power Group sorts the soaps as they come off the production line at the Kingston plant.

Soap maker and lumber distributor Blue Power Group continues to operate debt-free while racking up double-digit revenue growth, having paid off its loans last year.

"We had a loan with Development Bank of Jamaica to install solar [power]. But when we looked at rates, it was more prudent to pay off the loan," said Managing Director Noel Dawes.

Blue Power paid off the $5.5-million loan in its 2017 financial year and is now investing its cash. Earlier this year, the company announced that it put $154 million in a five-year bond to earn extra income.

Blue Power is also investing in its operation at the same time, having acquired two contiguous properties last year funded mainly from cash.

The group recorded $26.6 million net profit for its October quarter in 2018, up 52 per cent higher year on year, while sales increased by 12 per cent to $425 million.

Dawes attributes the increased sales to the general uptick in the local economy and increased distributors in Guyana.

"Things have picked up well," he said. "We also engaged in a series of restructuring of plant and operation. And now, we are starting to grow the business."

Still, while Dawes sees the outlook as generally positive, he cautioned that the local and export economies can be "finicky" and require quick adaptation.

"Soap is a personal item, and its growth has to be nourished and cultured," he said, adding that the soap business has a range of local and international competitors, with new entrants entering the market each year.

Over six months, Blue Power reported sales of $862 million, up from $761 million. Profits rose 55 per cent, $56 million, in the period.